Creating an “Export Culture” in the United States
Testifying before the U.S. Senate, Secretary of Commerce Carlos M. Gutierrez detailed strategies that are helping U.S. companies expand in the global marketplace.
by David Levey
Strengthening the U.S. economy, and the role that international trade plays in it, was the focus of recent testimony by Secretary of Commerce Carlos M. Gutierrez to the Senate Committee on Commerce, Science, and Transportation. When he spoke to the committee on August 1, 2007, Gutierrez noted that “trade accounted for 17 percent of world GDP [gross domestic product] in 1986. Last year, it accounted for 29 percent. We are trading and engaging more—but so is everyone else. That is why we must be focused on the growth and competitiveness of the U.S. economy.” Gutierrez also referred to the role played by the Commerce Department, and he pointed out, “One important way in which we are strengthening our overall economic position is by creating an export culture in our country.”
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|Secretary of Commerce Carlos M. Gutierrez speaks at a trade rally on Capitol Hill on September 10, 2007. He participated with other members of the cabinet in the launch of a campaign to pass pending trade agreements and to boost U.S. exports. (U.S. Department of Commerce photo)
Commerce Efforts Encourage Trade Growth
Gutierrez noted a number of ways that the Department of Commerce, and the International Trade Administration (ITA) in particular, is working to promote this export culture. ITA is targeting priority markets and industries with a high potential for export growth and is focusing its efforts on them. Those efforts include clean energy technology trade missions to China and India in April 2007, as well as a high-level business development mission led by Gutierrez to China in December 2006. Another mission is scheduled for Vietnam in November 2007.
National Export Strategy
Although trade missions are important for introducing U.S. companies to new markets, they are just one aspect of the federal government’s trade promotion efforts. Many additional resources are detailed in National Export Strategy, the recent report of the Trade Promotion Coordinating Committee. Those resources include reducing trade barriers, opening new markets, encouraging investment, and ensuring a level playing field.
Reducing Trade Barriers with Free Trade Agreements
Reducing trade barriers is a key component of U.S. trade policy. One of the most effective ways to do so is through the negotiation of free trade agreements (FTAs). Fourteen FTAs are now in effect, and an additional four—with Colombia, Panama, Peru, and South Korea—are awaiting approval by Congress. Gutierrez noted that the “agreements, if approved, [will] provide further access to 126 million consumers, with a combined GDP of $1.1 trillion.”
ITA, through its programs, plays a crucial role in helping American firms enter and prosper in those FTA markets. According to Gutierrez, “These agreements open markets for U.S. goods and services and, importantly, help export good governance, create stable markets, and reduce poverty in emerging economies.”
Opening New Markets with Trade Promotion Authority
To facilitate reducing trade barriers through FTAs, Gutierrez urged Congress to grant the president trade promotion authority (TPA). TPA is an agreement between Congress and the administration that allows the president to present a negotiated agreement to Congress for an up-or-down vote, provided that certain notice and consultation requirements have been met. The most recent extension of TPA expired on June 30, 2007.
“Trade promotion authority [is] an essential tool to ensure our continued export success,” said Gutierrez. “Many of our trading partners, including Asia and the European Union, are acting bilaterally to engage with each other. The United States cannot afford to sit on the sidelines.”
“Many of our trading partners, including Asia and the European Union, are acting bilaterally to engage with each other. The United States cannot afford to sit on the sidelines.”
— Secretary of Commerce Carlos M. Gutierrez
Encouraging Investment through Foreign Direct Investment
Trade and investment go hand in hand. Although the United States has historically been the world’s most attractive destination for foreign direct investment, today it faces increased competition for investment dollars. In response, the Commerce Department recently launched the Invest in America initiative to encourage foreign firms to invest directly in the U.S. economy. It is, said Gutierrez, “another area of the economy in which we are facing stepped-up competition and, therefore, must take on a more aggressive, proactive posture.”
Ensuring a Level Playing Field
An important responsibility of the Commerce Department is to ensure a level playing field for U.S. workers and industry. As global trade barriers come down, it is critical that U.S. companies be able to compete equally with everyone else. Accomplishing that goal entails safeguarding companies from unfair practices by using every available tool to enforce trade laws.
“We play by the rules, and it is only fair to expect others to do the same,” noted Gutierrez. “That is why, in March, I announced the Commerce Department’s preliminary decision to apply the U.S. antisubsidy law to imports of glossy paper from China. … [W]hen we find unfair trading practices … we will work to ensure an equitable, level playing field.”
Gutierrez pointed out that, since fiscal year 2001, the Commerce Department had initiated more than 620 compliance cases and had closed more than 450 of them as part of its Trade Agreements Compliance Program.
Protection of Intellectual Property
Another way an export culture is being created is by ensuring full compliance with agreements that protect intellectual property (IP) rights. IP industries represent 40 percent of U.S. economic growth and more than one-third of the value of all publicly traded U.S. companies, and they employ more than 18 million Americans. The Commerce Department has placed IP attachés in strategic markets and is a key participant in the Strategy Targeting Organized Piracy (STOP!), an interagency program that pursues the ambitious goal of ending trade in counterfeit goods.
Gutierrez concluded the international trade portion of his testimony to the Senate with a philosophy and strategy that guides the nation’s trade policy. “While we work to ensure a level playing field, we continue to acknowledge that isolationism won’t protect people or protect jobs. Our strategy is to grow exports, not limit imports. Protectionism doesn’t protect the economy or jobs. Only innovation, entrepreneurship, competition, and investment will protect and grow jobs.”
David Levey is a writer in the Department of Commerce’s Office of Public Affairs.